HomeContributorsFundamental AnalysisCanadian Dollar Slips to 4-Week Low, Current Account Next

Canadian Dollar Slips to 4-Week Low, Current Account Next

The Canadian dollar continues to lose ground in the Thursday session. Currently, USD/CAD is trading at 1.2890, up 0.20% on the day. The Canadian dollar has suffered a rough week, declining 1.4 percent. Currently, the currency is at its lowest level against the greenback since November 1. On the release front, Canada’s current account deficit is expected to rise to CAD $20.0 billion. The US releases unemployment claims and Personal Spending. On Friday, the US releases ISM Manufacturing PMI.

The US economy continues to perform well, and there was more good news on Wednesday, as Preliminary GDP for the third quarter posted a sharp gain of 3.3%. This was higher than the initial estimate of 3.0% and marked the fastest growth rate since Q3 of 2014. This was particularly impressive, as the southern US was battered by major hurricanes which caused significant economic damage. Consumer confidence levels are sky-high, but consumer consumption softened in the third quarter. However, business spending improved in the third quarter. Federal Reserve Chair Janet Yellen sounded upbeat about the economy, saying that the expansion was broad-based, across sectors of the economy.

Canadian inflation indicators pointed upwards on Tuesday, but the Canadian dollar couldn’t take advantage and lost more ground against the US currency. The Raw Materials Price Index jumped 3.8% in October, rebounding after a decline of 0.1% a month earlier. This marked the indicator’s strongest gain in 2017. The Industrial Product Price Index also rebounded after a decline, posting a gain of 1.0%. Elsewhere, Bank of Governor Stephen Poloz sounded upbeat about the stability of the financial system, noting that the labor market was strong and higher interest rates had helped cool the housing market frenzy.

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